LE SSON 3

Morheting Opportun itg Anolgsis

qnd Consumer Anolgsis

Marketing is a bisbattterutdo"::::,#rrw:::::,Y;;:;::,7;:::::;'r:;,icid.e s*ategrzing ltour moue

So plan!

45
46. EDWARD D. GONZALES

Let's Test the Morhet

NAME: DATE:
YEAR & SECTION: SCORE:

Multiple Choice: Encircle the letter of the correct answer

1. A term used by marketers in referring to the various factors and potent players that
make an impact on the ability of the company to establish and sustain a profitable re-
lationship with its target customers.
a. macro environment c. microenvironment
b. tactical marketing d. marketing environment

2. The means that the marketers identify in reaching the goals.

a. macro environment c. tactical marketing
b. marketing environment d. strategic marketing

3. The plan that marketers design in accomplishing goals.

a. marketing environment c. tactical marketing
b. strategic marketing d. macro environment

4. Comprises of individuals or institutions that provide resources necessary for the com-
pany.
a. macro environment c. suppliers environment
b. microenvironment d marketing intermediaries

5. Individuals or institutions that support the operations of marketing by promoting,

selling, distributing the goods to the consumers.
a. suppliers environment c. customers environment
b. market intermediaries d. competitors environment

6. Comprises of groups that have possible concerns or effect on the abiliry of the com-
pany to attain its goals.
a. competitors environment c. suppliers environment
b. customers environment d. public environment

7. Consists of companies that produce products in the same category in the market.
a. customers environment c. competitors environment
b. suppliers environment d. Public environment
 PRINCIPLES OF MARKETING o 47

8' These factors can force or restrain different groups or individuals in the given society.
a. factors
political c. cultural factors
b. economic factors d. technological factors

9. These are natural resources that are needed as inputs by marketers or that are affected
by m arketin g activities.
a. Natural factors c. demographic factors
b. technological factors d. economic factors

10. Systematic design, collection, analysis, and reporting of data to a specific marketing
situation facing an organization.
a. strategic marketing c. marketing research
b. tactical marketing d. descriptive research
48. EDWARD D. cONZALES

The Big ldea

In a market where competition is fast and tough, marketing a brand is strenuous. Market-
ers must learn how to strategize their moves and foresee the opportunities for their brands
to attain competitive advantage.

Finding competitive edge amid the highly competitive brands is not an easy task. Market-
ers should carefully weigh every information they generate from different environments
and turn it into their advantage by creating a marketing strategy and tactics that sell.

In this lesson, the use of strategic marketing and tactical marketing in creating marketing
plans will be discussed. The different marketing environments and how these environ-
ments create impact in the marketing plan of a brand will also be explored. Moreover,
lastly, this lesson will teach the readers the various elements of marketing research that
will be helpful in fine-tuning the marketing plan.

The Game Plan

At the end of the lesson, learners should be able to:
1. Distinguish between strategic and marketing planning regarding objectives and
processes
Analyze the elements of macro-environment and micro-environment and their
influence on marketing planning
3. Define marketing research, its importance to a business enterprise and identi$r
steps in marketing research

Qet Dorun to Business

One of the important lessons that a marketing practitioner should appreciate in creating a
strategic marketing plan is the relationship of strategic planning and marketing planning.

Strategic planning is a wide procedure that addresses the whole business, or a part ofthe business
like marketing.

Marketing planning is a process that staff from operatianal and managerial leuels work together
t0 credte and implement fficnue marketing strategies.

Marketing strategies can be derived from the strategic plan, which is designed to provide
the company, its divisions, or individuals with a road map to achieve specific goals and
objective.
 PRINCIPLES OF MARKETING o 219

Marketing plan, on the other hand, describes the action needed to interest potential cus-
tomers and persuade them to purchase the commodities being offered by the companies.

Strategic planning can recognize internal and external impacts and opportunities to regard
in designing the strategies and tactics. On marketer's point of view, strategic planning is
important to marketing because it can determine new market opportunities at the same
time identi$r new competitive challenges.

Distlnguishing Strotegic Morhetlng from Tocticol Marheting

In designing marketing plan, learners must understand the concept of strategic marketing
a
and tactical marketing. These two components are essential factors in crafting an effective
marketing plan. However, many marketers are still confused with the two relative ele-
ments. Here are some points that will draw a distinction between strategic marketing liom
tactical marketing.

Marketing starts with setting up the goals of the company. It answers the question "what
needs to be achieved?" The company formulates the goals based on the vision and mission
of the company.

In attaining these marketing goals, the companywill conduct planning to reach the desired
goals. This is where the strategic marketing takes place in the entire process of marketing.

Strategic marketing is the plan that marheters design in accomplishing goals. It attends to the
managing of the business growth regarding sales, competition and brand imaging which is
necessary for attaining competitive advantage in the market.

On the other hand, marketers will identi$' specific means to reach the goals based on the
strategic plan. This is where the tactical marketing takes in the marketing process.

Tactical Marheting is the means that the marbeters identify in reaching the goals.It deals with
the identified activities of the marketers for the realization of the goal.

The strategic marketing and tactical marketing works together and should complement
each other. Strategic marketing is the concept or the idea on how to reach the marketing
goals' Moreover, the tactical marketing is the set of actions that are needed to achieve the
 50. EDWARD D. GONZALES

goals. The marketers should harmonize the two elements of the marketing plan to create
a winning marketing camPaign.

Suateqic Tact ical

l,[arketinq" l,1a rke t in q l'[arketins
Goals (The IdeaJ (The Action)

Figure 3,1. Marketing Planning Process

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li

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j

tl

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 PRINCIPLES OF MARKETING o sr

Fresh Perspectlue: Plonning Morheting Strotegies ond Tocttcs

I
I
I

I
I
i

I
52. EDWARD D. GONZALES

Exploring Marheting Enuironment

Dynamic and fast changing, the Philippines is one of the markets in Asia that demonstrates
flexibilitythrough embracing the gift of modernity amidst its diversified traditional socio-
cultural characteristics. Complicated as it may seem, the Philippine market has entwined
its soul to the convenience and luxury of new technologies, which has shaped the majority
of its consuming public in all aspects of life through times.

To be appeased with the dynamic movement of the market, the companies must examine
and be familiar with the factors and other key players in its environment that would greatly
affect the performance of their business in connecting to its relationship with tle custom-
ers. Therefore, scanning the marketing environment will immensely help the marketer in
desi.gning the blueprint for the marketing campaign.

Marketing enuironment is a term used by marketers in referring to the uarious factors and strong
playrs that make an impact on the abilitjt of the companl to establish and sustain a prof.table
relationship with its target customers.

Aside from the help that it

will give in planning marketing programs, the study of *"rk"a-
ing environment will also provide the following advantages:
1. It can give the company a clear picture of competitive landscape that would help
them in competing with the other brand contenders
2. The company will easily see the opportunities and threats that would affect the
operations of the business
3. The company will be able to take advantage of the possibilities that will arise.

In the concept of marketing environment, the learners should understand the relationships
of the following variable:
L The Internal Environment
2. The External Environment
a. Microenvironment
b. Macro environment
 PRINCIPLES OF MARKETING . s3

Internal Enuironment
The internal environment comprises of factors inside the companythat affects the perfor-
mance of marketing efforts. This includes the internal public and functional divisions (as
discussed in Lesson I - Basic Organizational Structure) inside the organization.

The following are the internal factors:

L lVorkforce
- managers, supervisors, technical workers, administrative assistants
2. Equipment - Computers, printers, camera, photocopier machines
3. - training room, board room, manufacturing plant
Facilities
4. Materials - Paper, ink, batteries
5. Finance - Capital, sales, revenue

These internal factors should be managed effectively to deliver quality service and thus
maintain a harmonious relationship with the customers. One of the important factors that
need to be rnanaged is the workforce or the employees.

Based on the discussion in Chapter II, the workforce or the employees are very vital in the
operation of the company's business. The management should be able to motivate its peo-
ple through offering rewards, study grants, career advancement programi or promotion,
employee support programs, health benefits, insurance, and competitive compensation.
These offerings will promote productivityand efficiency in delivering the employee's tasks.

Motivated employees emanate positive attitude towards work. The more they are
motivated in reaching their goals, the greater the chance for the company to achieve its
marketing goals. The workforce is the backbone of the company. They are an asset to the
comPany. Hence, it is just to give them the support they need in delivering quality service
to the customers.

Equipment such as computers, printers, and manufacturing machines are one of the deter-
minants of employee's productivity. For artists, they need a good set of computer designed
for producing creative outputs that are needed for the production oflabels, packaging, and
Promotional materials. For manufacturing plant operators, they need highly reliable ma-
chines that have the capaciry to deliver qualiry products in the given target quantity in a
specific timeline. For the account executives, they need a laptop and other portable gadgets
for client presentations. Even for the maintenance workers, they need vacuum and electric
floor polisher to maintain the cleanliness of the office.
54 . EDWARD D. GONZALES

Everyone in the company, from the top management to the laborers, utilizes equipment to
deliver their duties and responsibilities. The company should always consider the manage-
ment of equipment. They need to conduct audit and maintenance program to secure the
reliabiliry and durability of the equipment needed fior the operation of the business.

A good working environment affects the working attitude of people. Taking this statement
literally, it means that facilities such as office space structure, the boardroom, training and
testing room, conference room, and laboratory are significant in the effectiveness and ef-
ficiency of the employees. For example, it is hard to meet customers and discuss the busi-
ness plan in an office room shared by many employees or worst, conducting a meeting in
the lobby of the company.

To have a corporate appeal for internal and external customers, proper facilities are needed
in the business. Meetings should be conducted in a boardroom or conference room, with
multimedia equipment that is needed for sales presentations, creative presentations, and
corporate presentations. Laboratories, manufacturing plant, and training and the testing
room should be designed according to its purpose to the business of the company.

The company should also manage office supplies and raw materials needed for bffective
operation of the business. No matter how high the motivation of the employees to perform
his duties, their intention will be defeated if there are no materials available to support the
employees efforts. Thus, safeguarding the availability of the materials for the employees is
providing them a chance to deliver their work efficiently.

In every aspect of the business, the financial factor is always involved. Finance supports
the operation of the business. In the production, for instance, the company will not be able
to produce products if there is no budget for buying raw materials that are needed for the
production or budget for buying equipment that the workers need for delivering their jobs.
Essentially, finance balances the capital and revenue to support the marketing efforts of
the company. Thus, poor finance management will greatly affect the operations of the
company.

ln the chapter, I, the discussion on the basic organizational structure reveals the interre-
lated functions of each division in reaching the marketing goals. It presented the idea that
aside from the Marketing Division, other divisions such as Human Resource and Training,
Accounting and Finance, and Production and Operations division have their contribution
in attaining the marketing goals. Moreover, these divisions are part of the internal envi-
ronment that needs to be managed to support the efficient implementation of the market-
ing process.
 PRINCIPLES OF MARKETINc . ss

Thus, the management should ensure the following:

- Reasonable distribution of task and responsibilities within the company
- Proper implementation of functions in each division by the marketing goals
- Ample available resources to sustain the operations
- Maintenance of excellent customer service culture
- Appropriate compensation, promotion and rewards to employees

Extern"al Enuironment
Microenvironment is part of the external environment in marketing. It consists of factors
that are near to the cornpany, which has an impact on the delivery of the products and
services. These factors are individuals or institutions that affect the marketing programs
of the company. These are the supplier, the market intermediates, customers, competitors,
and public.

.\
Suppliere

\-/

Xsrket
Pub 1 ic intersediates

C ompa.ny \/
\ 1
("'")
€*.,'
Fig32. Micro Enuironment in Marketing
s6 o EDWARD D. GONZALES

The Suppliers Enuironmenl comprises of individuals or institutions that provide re-

sources necessary for the company. It has considerable effect on the marketing opera-
tion of the company. For example, if the suppliers of flour increase the price in the
business market, the price of bread products and other products that utilize flour as an
ingredient in producing products will be affected. Therefore, the marketing operation
of the company will also be affected.

The Market Intermediates are individuals or institutions that support the operations of
marketing by promoting, selling, distributing the goods to the consumers. These are
distributors, department stores, grocery stores, and financial organizations. A rypical
scenario where a company is affected by this environment is when, for example, a de-
partment store launches 50% discount promotion in all items during holidays. The
company should mark down the price of its product to 50% to match the promotion
of the department store that distributes the company's product. This may work as an
advantage to the company or it may not. Depending on the agreement between the
company and the department store.

The Customers Enuironmettf as discussed in Chapter II - Types of Customers according

to market, this en',rironment is complicated since that each has different typesbf needs
to be satisfied. Thus, the marketer should analyze this environment to establish and
maintain a harmonious relationship with them.

The Compefrtors Enuironmanf consists of companies that produce products in the same
category in the market. An example of this is ready to drink fruit juice category. There
are many ready to drink fruit juice out in the market. Consumers may find them in
different sizes, flavors, and packaging, which are produced by numerous companies. If
a company offers products in the same category, it is a smart move for the company to
pay a closer look its competitors. In this tough environment, the marketer should find
a way to outsmart its competition by seeing the entire picture using the lens of the
PaFng customers.

The Public Enuironment comprises of groups that have possible concerns or effect on
the abiliry of the company to attain its goals. In this environment, learners may find
the following:
1. Financial Publics - banks and other investment institutions
2. Media Publics radio, television and print media or networks
-
3. Gouernment Publics - Department of Trade and Industry, Department of Edu-
cation, Department Social \Telfare and Development
 PRINCIPLES OF MARKETING T 57

4. Citizen-Action Publics - environmental groups, gender empowerment groups,

child protection groups

The marketing programs of the company may call the attention of the public, which
is based on its thrust and priorities. For example, during a major disaster, many com-
panies help victims of disasters by giving them goods that will help them in surviving
the calamity. This good gesture of companies, as part of their corporate social respon-
sibility, may call the attention of media groups and will feature the company's story of
helping the victims of disasters in their media channels. This will be a good publicity
and at the same time free media mileage to the company.

The macro environment, on the other hand, has greater societal factors that affect the en-
tire business programs in the industry. The following are the factors that make impact on
the macro environment:

l. Politicql Fqctors - this includes legal, government agencies and pressure groups.
These factors can force or restrain different groups or individuals in the given
society. Business activities such as marketing programs are subject to various laws,
policies, and regulations developed by the government to protect the companies,
consumers, and public interest. For example, sales promotion such as discounts is
subject to the scrutiny and approval of the Department of Trade and Industry or
DTI. The company has to apply for DTI permit for the sales promotion activities
like discounts. This regulation will serve both the customers and the companys
rights and protection. The challenge that most companies are facing is the expand-
ing legislation and the changing government agency implementation of regula-
tions. Thus, the marketers should be fully aware of these trends in laws, policies,
and regulations concerning business and commerce because it will greatly affect
the implementation of the company's marketing programs.

2. Economic Factors -
this consist of variables that affects the consumers purchasing
power and patterns. The marketer should study the following trends under the
economic environment:
a. Gross National Product or GNP
b. Consumer's growth income
c. Income distribution
d. Impact of oil price about transportation fares and commodiry prices
e. Recession or economic decline
The said factors have a significant implication on the buying and consumption
patterns of the customers. Giving a practical example is when the price of oil in
.58 o EDWARD D. GONZALES

the market increases, the likelihood of increasing the price of the commodities in
the market is largely conclusive. However, there is no adjustment in the wages of
the workers. Thus, the income of the household witl be stuck while the prices of
commodities are moving upward. \Cith this scenario, household's capaciry to buy
more commodities out of their income decreases. There will be fewer commodi-
ties that the can put into their baskets given the depreciated value oftheir budget.
The buying of their usual goods they consume is at risk. They might sort to aher-
native products that offer at the lower price. In this type of situation, marketers
should have a ready marketing strategy that will make this threat an opportunity
to sell.

Marketers should identifu the socio-economic status of the customers to strategize

the marketing programs better. In the book Principles of Marketing, Ac-as pre-
sented a table showing the social and economic status of Filipinos in 2001.
 PRINCIPLES OF MARKETING o .ss

Upper-Class

Large landowners
Highly successful professionals
Prominent business people
Top government offi cials

Upper-Middle Class
Owner of farms over 20 hectares
Most professionals
Operators of medium-size business
Middle-echelon government administrators
Some university p rofessors
Bank, department stores, factory manager

Lower-Middle Class
Lower-echelon government workers
Most professors and teachers
Owners of farms of 3 to t hectares
Nurses
Some small business people

Upper-Lower Class
Factoryworkers
Skilled workers
Small farmers
Store clerks
Office workers
Most sari-sari store operators

Lower-Lower Class
Unskilled laborers farmers with less than l1/z hectares
Most household servants
Landless farm labor * most tenant farmers
Most physically handicapped

Table 3.1 Socio-Economic Class

6o o EDWARD D. GONZALES

3. Cultural Fqctors - these are institutions and other factors that make an impact on
the basic values, perspective, choice, and other behaviors. In the country, the cul-
tural environment is comprising of the following:
e Language .Religion
o Festivals .Customs, Traits, and Traditions
o Food
Divided by Several islands, clustered in 18 regions from Luzon, Visayas, and Min-
danao, The Philippines offers rich, colorful, and diversified culture because of its
geographical characteristic. The cultural environment that can be seen in Luzon
is partly different from the Visayas, which is also different from Mindanao.

Language. The country's primary language is Filipino. However, regarding local

language, the country has several dialects such as Tagalog, Ilocano, Pangasinan,
Kapampangan, Bicolano, Cebuano o Bisaya, Hiligaynon, and \7aray-\7aray. For-
eign languages can also be found in the country such as English, Mandarin,
Fookien, Cantonese, and Spanish.

The language barrier can affect the effectiveness of the implementation of the
marketing programs like advertising. For example, many people in Visayas region
are not well versed in Filipino. Therefore, using Filipino as a medium in advertis-
ing the product or service in the Visayas is not a smart thing to do because it will
not be comprehended perfectly by the Visayan communities. The best thing to do
is to have a Bisaya version of the advertisement that will be distributed in the Vi-
sayas Region. In this way, the advertising material will be easily understood in the
comrnunities.

Festiuals.In almost all regions, there is a festival that is being celebrated yearly by
its people. Some of the popular festivals in the country are the following:
o Ati-Atihan Festival in Kalibo, Aklan
o Sinuiog Festival in Cebu
a Pahiyas Festival in Lucban, Quezon
a Moriones Festival in Marinduque
o Panagbenga Festival in Baguio City
a Kadayawan Festival in Davao
a MassKara Festival in Bacolod
a Pefr.afrancia Festival in Naga
o Lechon Festival in Balayan, Batangas
a Kaamulan Festival in Bukidnon
 PRINCIPLES OF MARKETING T 6T

Events such as Philippine festivals are the perfect venue for the promotion of the
product. Many companies sponsor festivals for various reasons. One of those rea-
sons is the exposure of the product to captured audience of festivals. For example,
the Baguio Ciry celebrates every year the Panagbenga Festival or Flower Festival
during the month of February. Moreover, each year, thousands of people from the
different parts of the country and in the world join the merriment. For marketers,
this is an opportunity to have product exposure that may lead strong brand aware-
ness.

Food.The country has rich taste when it comes to food. From the traditional reci-
pes to the modern cultural twist, modern Filipinos are adventurous eaters. In tra-
ditional perspective, the Philippines offers varieties of food depending on the
region. In Northern Philippines, Ilocanos are famous for their Pinakbet and Ka-
pampangans are known for Sisig. In Central Philippines, the Bicolanos offer very
spicy food like Bicol Express and llonggos provides delectable dish like Kabios Bq-
boy Langhaor KBL. Moreover, in Southern Philippines, people in Mindanao offers
Saftr and Rendang.

Companies from the food industry in the Philippines such as restdurants, fast food
chains, and all food products pay close attention to these variables. For them, the
ever-changing taste buds of Filipinos serye as their bible in formulating their
menus, flavors, ingredients and cooking style. Example, Sisig is a famous dish from
the Luzon. Thus, many food companies saw the potential of the dish as highiy
marketable. That is why many food technologies of different companies developed
the dish and became part of their menu. Now aside from pork sisig, there are beef
sisig, chicken sisig, bangus sisig, and squid sisig for the non-pork eater. Moreover,
it is now available in cans so that it will be consumed by people anytime, anywhere.

Religion The Philippines is a Christian nation. Most of the people in the country
are Roman Catholic. Islam is found largely in Mindanao region. Religion has a
great impact on the beliefs and values of Filipinos. Some celebrated holidays and
festivals in the country are related to religions.

In the subject of moral and spiritual values, companies should realize that religious
dogmas have an effect on the marketing operations. For instance, a man with a
strong commitment to his Christian faith will ignore the discounted price of con-
dom because, in some Christian religions, only the natural method of family plan-
ning is acceptable.
6z r EDWARD D. GONZALES

Customs, Traits, and Traditions. Filipinos are rich in customs, traits, and traditions.
Some of which are the following:
r Mano Po - a gesture made by young people to the elders as a sign of re-
spect and also a blessing was given to the young from the elderly. The
child will hold the right hand of the elderly and presses his forehead at the
back of the elder's hand-
r Bayanihan - showing the spirit of unity in the community, neighbors help
one another to achieve a goal. Carrying neighbor's house or hut to place
it to another location is a typical example of Bayanihan.
. Harana - it is a traditional way of courtship. The man will express his
feelings by singing a song to the woman.
o Pakikisama - is a Filipino trait that shows the spirit of camaraderie among
friends or colleagues. However, pakikisamahas some negative implication
to the person doing it. Sometimes out of pakikisa.ma, aperson is forced to
do things that he or she does not like to do just because his or her friends
or colleagues are doing it.
o Utang na loob - a debt of honor. Filipinos give gratitude to peoples that
have helped him financially or gave moral supporr.
o Pasko -
or Christmas is being celebrated in the Philippines. Many tradi-
tions are made to relive the spirit of Pasko like hanging of parol or Christ-
mas lantern in the window and attending Misa de Gollo or the nine-day
mass in the dawn.
Many marketers depict customs, traits, and traditions in the product and service
advertisements. This is because many audiences can easily relate themselves to the
advertisement if the scenes portrayed popular customs llke Mano P0 or traits like
Utang a loob for instance.

Thus, understanding the cultural factors will provide the marketers better under-
standing of the cultural characteristics of the different market that may be used as
an opportunity for the company to draw a competitive advantage.

4. Natural Factors - these are natural resources that are needed as inputs by marketers
or that are affected by marketing activities. The natural environment is affected
by the following:
o Protectionofresources
r Ecotourism
. Recycle and reduce waste
 PRINCIPLES OF MARKETING o 63

The production ofproducts may be affected by the shortage ofnatural resources

such as forest, agricultural products, marine products, minerals, oil, and coal. As a
source of the raw materials in producing the products become insufficient, the cost
of the raw materials will increase. This means the price of the product will also
increase.
Some companies do proactive marketing programs to address this threat like ini-
tiating tree-planting programs, support government initiated proBrams like reha-
bilitation of rivers and saving wildlife, and instigating the use of biodegradable
and/or recyclable materials for the packaging of the product.

5. Technological Factors - these are variables that produce new technologies, create
new products, and discover marketing opportunities. The technological environ-
ment affects the operations of the business through the birth of new technologies.
For example, the companies that have used telemarketing in the 90's and e-
marketing in 2000 are now learning and implementing digital marketing.

The learning curve of the companies in the use new technologies is critical com-
petition. The company that adapts and adjusts faster to new technologies has a
greater edge to its competitors. However, this has an effect to .o-p".ry regarding:
. Expenses in training employees and hiring consultants or new employees
to facilitate the changes brought by the new technology
o Time and effort in training people
o Purchasing of equipment to support the new technology
r Changes in the organizational structure especially if the new technology
will require creating another division or unit

6. Demographic Factors - It deals mainly with

the population of human according to
size, densiry localion, age, gender, race, occupation, and other statistics essential
in the description of the market.

The demographic environment is essential to marketing. It helps companies to

identify potential market for products and services. It serves as a baseline for
strategizing the marketing activities. For instance, if demographic environment of
the target customers show tendency to be busy, active, and young executives in
prime business areas in Metro Manila, marketers, may focus on producing
advertisements that highlight the fast and easy-to-use features of the product,
which will be placed in the prime business areas to ensure maximum reach and
exPosure.
64. EDWARD D. GONZALES

ln studying the demographic environment, the marketers must understand and

f-ully observe the following:
e The customers are aging - the age of the customers changes yearly. The
youth of the yesterday is the adult of today. So as the time passes, the mar-
ket grows old and many of its needs changes. For example, as young
adults, they enjoy drinking soft drinks. However, as these young adults
reach old age, their product preference changes. Most of them will switch
to more healthy drinks that will provide them with needed nutrients in
combating the old age-related diseases like diabetes and hypertension.

This is a marketing phenomenon that marketers must foresee. If this will

happen, marketers must find opportunities to maintain their relationship
bydeveloping the product or service based on the changing needs ofthe
aging customers. Companies may offer low in calories, zero cholesterol
or sugar-fiee products to satisfy the new needs ofthe customers.

New markets are immerging - The marketers must also consider the birth
of new market that is potential new customers of the product. For in-
stance, the girls in their teen years today are potential users of tosmetic
products, as they become ladies in the future. Some companies see this as
opportunities to bridge these future users of their products. Thus, they
offer pressed powder and lipstick for teenagers.

The marketers must understand that the age of the market evolves.
Hence, here are the age generations that marketers may refer:
a. The baby boomers. This age generation is the middle age group
going to old age in the market today.
b. 'fhe generatian X or Gen X, which is syrnonymous to 'MTV gen-
erations'due to the heavy influence of Music Tele'rision channel
in the 80s era. Started after the babyboomers, this age generation
in now entering the middle age group of the market.
c. The generation Y may also refer to echo boomers or millennial
generation. This age generation occupies the youth segment
(children and teens) of the market today. They are characterized
by heavy dependence on new technologies.
 PRINCiPLES OF MARKETING. 6s

The family structure changes - The family is the prime target customers of
many companies. Its changing structure will affect how marketers de-
l-elop strategies in promoting the product in the market. Different types
of the family have different buying decision process and the purchasing
roles of the members.

For example, earning the same monthly income, in the joint family or aiso
called undivided family, where two or more generations being related to
either paternal or maternal line are living in one household, product
preference and consumption is different from nuclear family or also called
elementary family, where there are only two parents and their children
living in a household.

A joint family with seven members may buy products for the elderly like
medicines and supplementary food because the grandparents are part of
the households and dependent on the main familys income. Thus, this
may affect the family's budget allocation and product preference. The
family will choose products with a price that suits the family's budget, and
at the same time satisfuthe needs of each member.

l;
I
On the other hand, a nuclear family with four members has a bigger I
,i

chance to purchase products with greater value for each member because 1

the budget allocation is divided into a lesser number.

The marketers must also consider the role of each member of the family
in purchasing. Here are some guide questions that will identify the critical
role of the family membersl

1. \7ho identifies the needs to purchase products for the family?

2. \7ho are interested in buying and seek information to the
products?
3. Vho influences to evaluate choices, set criteria, and the final
choice?
4. \fho makes the final decision?
5. \7ho does the actual buying?
66 r EDWARD D. GONZALES

Conducting Morheting Reseorch

-Jfhether for individuals, institutions,
products or services, marketing research has proven
its worth in putting depth and precision in planning and implementing marketing cam-
paigns.

Through marketing research, companies get information such as consumer insights that
are pertinent in developing superior brands and establishing meaningful relationships with
customers. For instance, marketers conduct marketing research to find out how customers
will think, feel and act on certain marketing programs, what motivates them to buy the
products or service, and why they prefer this brand above any other brands in the market.

These facts are pertinent in developing a plan for products or services. It will give the mar-
keters ideas in formulating strategies and tactics in attaining the marketing goals. Thus, it
will provide the companies a competitive advantage.

According to Kotler and Armstong, marketing research is s1stematic design, collection, anall-
sis, and reporting of data to a specific markehng situationfacing an organization.

In conducting a marketing research, marketers follow a systematic procedure in gathering

and analyzing data. This procedure has four steps as shown in figure 3.3.

Defining the Developing the

probleu and researeh plan int e rp ret ing
and reporting
r es ear ch for collecting the fiadings
obj e ct ives infornat ion

Figure 33. The Marketing Research Process, Kotler, and Armstrang

Step 1. Defining the probbm and research obje*iaes,In this step, the marketing team must
determine the problem and tie research objectives. Though this step is usually the hardest
part ofthe process, the researchers should understand the nature ofresearch and the pos-
sible best source of information.

In determining the problem, the marketing group may be guided by these two (2) ques-
tions:
1. 'Why is there
a need to conduct a marketing research?
2. \What particular gap in marketing that needs to be addressed?
 PRINCIPLES OF MARKETING . 67

Utiiizing these two questions, the marketing group may arrive at various answers li-ke:
"\(/e would like to find out why our brand is not gaining attention to the market de-
spite our massive advertising efforts."

"\fle have to know the reason why brand X has captured the majority of the market
share while brand Y and brand Z are sharing a little portion of the market."

"\7e want to know the perception of the customers on the existing product features
of our brand against the other brands."
\Thatever reasons companies have in conducting marketing research, may it be about
sales, competition or consumer behavior the marketing team should carefully weigh the
factors and come up with a relevant research problem.

After the marketing team identifies the research problem, they have to formulate their
research objectives. In formulating the research objectives, the marketing team may base
it in the three types ofresearch objectives.
1. Exploratory reseorch - the main purpose of this research is to collect initial infor-
mation that will help define problems and suggests hypotheses
2. Descriptiue research -
the main purpose of this research is to describe marketing
problems, situations or markets, such as the market potential for a product or the
demographics and attitude of customers
3. Ceusal Research - the main purpose of this research is to test hypotheses about
cause-and- effect relationships.

The marketing team must understand that the statement of the problem and research ob-
jective serves as a guide in the total research process. Thus, the entire marketing team
should concur on the identified problem and objectives in the marketing research plan.

Exploratory eto colLect initial iufornation tbat ui11 heLp defiae probi.els
Res earch arld s'{ggests hypotbes€s

Descriptive oto degcribe aarlrtilg 9rob1elc, situatiols or larlets, stch

aa tbe uarket poteltiai for a product or tire deuographics
Res earch Erd s!titude of custoEer6

Casual Research .to test hypotleaea sbout cause.and-effect rel.atl.olships.

Figure 3.4. Types of Research Objectiues, Kotler, and Armstrong

68 r EDWARD D. GONZALES

Step 2, Deuehping & rese&rch planftr colleaing information In this stage, the marketing
team must develop a research plan that would be the basis of the information that needs to
be gathered efficiently in attaining the research objectives.

Marketing research plan may contain the following variables:

- Statement of the problem
- Research objectives
- Significance ofthe research
- Scope ofresearch
- Existing data
- Research approaches
- Research methods
- Sampling plans
- Research tools or instrument
- Research cost
The research team must prepare a written proposal containing the marketing research
variables. The written proposal is useful in presenting the ideas to the management and in
implementing the research later on.

In gathering information needed for the planning the marketing research, the marketing
researchers may gather secondary data and/or primary data depending on the information
needs of the management.

Secondary data - these are existing information gathered to serve some other purpose or
use. In gathering secondary data, the marketing team may refer to its internal database or
may call on services from other sources of information like business data services and gov-
ernment information services.

The advantages ofusing secondary data:

l. Low cost
2. Can be acquired faster because the data is already available

The downside of using secondary data is when the specific information needed by the
company may not eiist, or the information is not updated.

Primary Data - these are information gathered to serve the specific purpose of the research.
The research team should ensure that all information collected is significant, precise, up-
dated, and impartial.
 PRINCIPLES OF MARKETING T 59

In gathering primary data, the marketing researchers consider research approach, meth-
ods, sampling, and instrument.

Research Approaches:
1. Obseruahon Research - collecting data through observation of famous people, ac-
tions, and reactions to situations.
2. Suruey research - collecting data through inquiry to people on their knowledge,
choices, perception, attitude, and behavior.
3. Experimental - collecting data through the choice of matched groups of subjects,
exposing tlem into different treatments and controlled tests.

Contact Methodc,

L. Mail questionnaires - information can be attained by emailing the questionnaires

to the target customers
2. Telephone interviews - target respondents can be reached through phone calls
3. Personal interview (Focus interview and focus group interview) - the personal -|
interview is a good source of rich information because it does not only provide
researchers with answers to the questions but also, the researche; can observe the
nonverbal reactions of the interviewee. Focus group interview consists of five (5)
to six (6) being interviewed at the same time. It is usually in a form of discussion. {

4. Online - gathering data using online survey or online focus group interview using li

a web camera.

Sampling Plan:
The term sample refers to a segment af the population selectedfor the marketing research to rey
resent the population as a whole (Koder and Armstrong).

The marketing researchers select a sample that would best represent the target population
to make an accurate analysis of the generated customer's insights.

There are three (3) factors that need to be considered in designing the sample in marketing
research. These are the following:
1. Samplingunit-It refers to the subject (perso.t or group of people) that will be
studied. Marketing researchers may select one sample among the target popula-
tion of the research to represent the whole. For exarnple, when studying the buy-
ing behavior of college students in Metro Manila on fast food products, a single
college student in a university can be a sampling unit.
r
I
I

70 r EDWARD D, GONZALES

3. Sampling size - it refers to the number of subjects to be included in the study. Ex-
ample, how many students should be included in the study? The size of the sample
may be determined depending on the statistical considerations and the cost of re-
search. The reliabiliry of the results may be affected by the sampling size.
4. Sampling procedures - It refers to the process of selection of the sample. How the
subject in the sample be selected? The marketers may use probability samples or
nonprobability samples in their selection.

Probabiliry Samples:
a. Simple random sample
b. Stratified random sample
c. Cluster (area) sample

N onprobobility Sample s:
a. Convenience sample
b. Judgment sample
c. Quota sample

Reseqrch instruments

I
i
Marketing researchers may use questionnaires and/or mechanical instruments in gather-
I i.,g primary data.

Questlonnaires. It is the most common research instrument. Many researchers use ques-
tionnaires as a tool in gathering data, whether for a personal interview, mail, telephone,
and/or online.

Questionnaires are a flexible instrument of the researcher. Marketing researchers may ask
closed-end questions or open-end questions to the respondents depending on the objective
ofthe research.

Closed- end questions provide possible answers to choose. For example:

\fhere did you learn the services being offered by the shop?
a. Referred by family, friends or colleagues
b. Through TV, radio, and print advertisements
c. Online Ads via e-mail or Facebook accounts
d. Others
 PRINCIPLES OF MARKETING o zI

Open-end questions provide respondents to use their words in answering the questions.
This allows marketing researchers to understand the consumers better by finding out what
they are thinking. For example:
a. \7hat is your stand in the changing concept of beaury among Filipino women?
b. 'W'hat is your point of view on Filipino women using skin-whitening products,
like soap, lotion, pillslcapsules, or injectable serum?
c. \What is your opinion on products that offers skin whitening results in
iust one (1)
week?

Mechanical Instruments. Marketing researchers can also use mechanical devices to monitor
the behavior of the customers. Some companies use people meters or retail scanners in
getting information on the consumer behavior.

lmplemnting thc reseorch plan - collecting and analyzing the data.In this stage, the
Step 3.
marketing researchers implement the research plan. The research team is carefully admin-
istering the collection ofdata to secure reliability and accuracy ofthe results.

After the data collection, the marketing research team will thoroughly prpcess and analyze
the information being gathered or generated flom the target respondents. In this process,
the research team must secure utmost accuracy and completeness of the data to be treated
and analyzed. In the research process, this is the most tiring and expensive stage. Thus, the
marketing research team should be prepared and equipped.

Step 4.Interpreting andreportingthe findings.In this stage, the marketing researchers will
interpret the processed data and come up with findings and conclusions before reporting
it to the management.

The marketing research team should report the significant findings and insights that will
help management in making major decisions.

On the other hand, managers also have a major role in interpreting the generated data.
Managers'insights are peftinent in giving an in-depth interpretation of the information.

The interpretation stage is the most crucial part ofthe market research process. Some com-
panies hire marketing research specialists and statisticians who will work rogether with
the marketing research team and managers just to ensure accurate and reliable interpreta-
tion of the information.
72 T EDWARD D, GONZALES

The Sgnergg
1. Form a group of five and read the case study below.

Mommy's Choice instant noodles have been in the industry for ten years. The brand has
earned its position as number one instant noodles among lower class market because of its
affordability and its distinct Filipino flavors such as Beef Sinagang, Seafood Pinnngat, and
Chicken Sinampalukan noodles. The management of Mommy's Choice would like to step
up its position in the market. They want to conquer the middle-class market.

Given this case studR please answer the follow:

a. \fhat will be the marketing goal, marketing strategy, and marketing tactics of
Mommy's Choice to conquer the middle C market?

Marketing Goal Marketing Strategy Marketing Tactics

b. How will you describe the external marketing environment of Mommy's Choice?
1. Microenvironment
a. Consumersenvironment
b. Competitorsenvironment
c. Public environment

2. Macro environment
a. Political factors
b. Economic factors
c. Cultural factors
d. Natural Factors
e. Technologicalfactors
f. Demographic factors
 PRINCIPLES OF MARKETING . 73

2. Form a group of five and read the case studybelow.

Kinis Pinay Corporation or KPC, the leading manufacturing company of whitening
products in the Philippines, plans to launch another soap that would cater infants and
toddlers. KPC intends to name the soap as 'Baby Puti' Milk Soap because of its after
effect benefits. 'Baby Puti' helps to smoothen and whitens baby's skin without irrita-
tion. However, KPC is not sure if the mothers will like the idea. Thus, theywould like
to hire a group of the market researcher to conduct market research for the product.

Based on the case study, please answer the following:

1. 'W'hat approach in market research is suitable for the case? Please support your
answer.
2. Design a market research plan for'Baby Puti'Milk Soap. Please be guided with the
matrix below

Statement of the problem

Research objective/s

Sampling unit

Sampling size

Sampling procedure

3. Develop a questionnaire and distribute it to 20 mothers.

4. Gather the questionnaire and interpret the answers of the target respondents.

5. Based on the findings, what will be your recommendation to KPC?

z4 r EDWARD D. GONZALES

Raise The Bar

NAME: DATE:
YEAR &SECTION: SCORE:

L ldenffication:'rl(rite the correct enswer.

1. It deals mainly with the population of human according to size, densiry,
location, age, gender, race, occupation, and other statistics essential in the
description of the market.

2. These are institutions and other factors that make an impact on the basic
values, perspective, choice, and other behaviors.

3. These are natural resources that are needed as inputs by marketers or that
are affected by marketing activities.

4. This includes legal, government agencies and pressure groups. These fac-
tors can force or restrain different grouPs or individuals in the given so-
ciety.

5. A term used by marketers in referring to the various factors and potent

players that make an impact on the abiliry of the company to establish and
sustain a profitable relationship with its target customers.

6. It refers to the process of selection of the sample.

7. The main purpose of this research is to collect initial information that will
help define problems and suggests hlryotheses.

8. It refers to the subject (person or group of people) that will be studied.

Marketing researchers may select one sample among the target popula-
tion of the research to represent the whole.

9. Systematic design, collection, analysis, and reporting of data to a specific

marketing situation facing an organization.
 PRINCIPLES OF MARKETING O 7S

10. The main purpose of this research is to describe marketing Problems'

situations or markets, such as the market potential for a product or the
demographics and attitude of customers'

il. Enumeration: Vnte the correct cnswer.

1-5. Five (5) factor in internal environment in marketing'

2.

3.

4.

6-8. Three (3) approaches in marketing research'

6.

7.

8.
I
',1

9- 10. Two (2) typ.s of sample procedure

9.

10.

I
 z6 o EDWARD D. GONZALES

Qo Extro Mlte
Intcnriprxr tq/6 cets of f'e . Get the follo wln details:
FAMTLY A FAMILY B
VARIABLES

t. Number of Household
members

2. Monthly income

MonthlyAmount
spends in basic com-
modities (food, water,

I
electricity, etc.)
ir

I
I same sets of familY, ask the f"49"*"
FAMILY A FAMILY B
I
\7ho identifies the needs to
ll purchase Products for the
family?
il
t, b. 'Who are interested in

buyrng and seek information

ii to the Products?

c. 'Who influences to evaluate

choices, set criteria, and the
final choice?

d. \7ho makes the final deci-

sion?

e. 'Who does the actual bu

to the two families and write your

.)_ Based on the gathered data, compare the answers
findings.

between the two families'

Report to the class the significant similarities and differences